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Purchase Price Allocations — ASC 805 (Formerly FAS 141R)
Financial Accounting Standards Board Accounting Standards Codification (ASC) 805 (formerly FAS 141R) governs the accounting and reporting of acquisitions which occur in 2009 and beyond. This standard provides several substantive changes to the methodologies which must be employed when accounting for business combinations. Under this standard, when an acquisition occurs a purchase price allocation must be performed whereby the consideration paid is allocated across a variety of tangible and intangible assets.
SVB Analytics' ASC 805 service includes:
Determination of the consideration paid in the transaction (including contingent consideration)Identification of assets acquired and liabilities (including contingent liabilities) assumed in the transactionValuation estimates for identified intangible assets and liabilities using appropriate income-, market- and cost-based valuation approachesAssistance in the assessment of asset lifeComplete narrative report detailing our findings including supporting exhibitsGoodwill and Intangible Asset Impairment — ASC 350 and ASC 360 (Formerly FAS 142 and FAS 144)
ASC 350 governs the accounting treatment for goodwill and indefinite-lived intangible assets once identified in a business combination. Under the standard these assets are no longer amortized, but rather are tested annually for impairment at the reporting unit level, as well as on an interim basis if an adverse triggering event takes place. If the test is passed, no impairment is recognized and no further analysis is required. If the test fails, an analysis must be performed in order to determine the magnitude of impairment, if any, which is attributable to goodwill.
ASC 360 governs the accounting treatment of finite-lived intangible assets. Similar to ASC 350, a two-step test is required to determine impairment. However, in contrast to ASC 350, the initial test to determine impairment requires the use of undiscounted cash flows attributable to the finite-lived intangible asset.
SVB Analytics' ASC 350 and ASC 360 services include:
ASC 350 — Determination of the fair...
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Purchase Price Allocations — ASC 805 (Formerly FAS 141R)
Financial Accounting Standards Board Accounting Standards Codification (ASC) 805 (formerly FAS 141R) governs the accounting and reporting of acquisitions which occur in 2009 and beyond. This standard provides several substantive changes to the methodologies which must be employed when accounting for business combinations. Under this standard, when an acquisition occurs a purchase price allocation must be performed whereby the consideration paid is allocated across a variety of tangible and intangible assets.
SVB Analytics' ASC 805 service includes:
- Determination of the consideration paid in the transaction (including contingent consideration)
- Identification of assets acquired and liabilities (including contingent liabilities) assumed in the transaction
- Valuation estimates for identified intangible assets and liabilities using appropriate income-, market- and cost-based valuation approaches
- Assistance in the assessment of asset life
- Complete narrative report detailing our findings including supporting exhibits
Goodwill and Intangible Asset Impairment — ASC 350 and ASC 360 (Formerly FAS 142 and FAS 144)
ASC 350 governs the accounting treatment for goodwill and indefinite-lived intangible assets once identified in a business combination. Under the standard these assets are no longer amortized, but rather are tested annually for impairment at the reporting unit level, as well as on an interim basis if an adverse triggering event takes place. If the test is passed, no impairment is recognized and no further analysis is required. If the test fails, an analysis must be performed in order to determine the magnitude of impairment, if any, which is attributable to goodwill.
ASC 360 governs the accounting treatment of finite-lived intangible assets. Similar to ASC 350, a two-step test is required to determine impairment. However, in contrast to ASC 350, the initial test to determine impairment requires the use of undiscounted cash flows attributable to the finite-lived intangible asset.
SVB Analytics' ASC 350 and ASC 360 services include:
ASC 350 — Determination of the fair value of the reporting unit using income-, market- and asset-based valuation approaches to determine whether the fair value exceeds the carrying value of the reporting unit's equity or invested capital
- Intangible asset valuations to support step two of the impairment process should the step one tests fail (See the ASC 805 service description for additional information)
ASC 360 — Determination of the undiscounted cash flows of the subject finite-lived asset to determine whether the asset passes or fails step one of the impairment process
- Complete narrative report detailing our findings including supporting exhibits
Why SVB Analytics?
SVB Analytics, a member of SVB Financial Group and a leading provider of corporate valuation opinions, offers ASC 805 and ASC 350 and ASC 360 analyses to assist companies with their accounting treatment related to acquisitions and impairment testing. Our staff has a depth and breadth of technical experience providing these opinions and our work has successfully been reviewed by a number of audit firms including the Big Four. Further, since our practice is focused primarily on companies in the technology and life science industries, we understand the key issues which need to be addressed for these financial reporting opinions.
SVB Analytics is a non-bank affiliate of Silicon Valley Bank and a member of SVB Financial Group. Products and services offered by SVB Analytics are not FDIC insured and are not deposits or other obligations of Silicon Valley Bank. SVB Analytics does not provide tax or legal advice. Please consult your tax or legal advisors for such guidance.